Judge blocks implementation of new 'dark money' disclosure law

David Levinsky @davidlevinsky

Wednesday

Oct 2, 2019 at 6:22 PMOct 2, 2019 at 6:25 PM

U.S. District Judge Brian Martinotti granted a preliminary injunction blocking the new law’s enforcement on Wednesday in response to a lawsuit filed earlier this year by Americans for Prosperity, the conservative group founded by the Koch brothers.

TRENTON — A federal judge has put a hold on implementation of New Jersey’s new disclosure law requiring so-called “dark money” groups and other nonprofits that engage in political activities and lobbying to reveal their donors.

U.S. District Judge Brian Martinotti granted a preliminary injunction blocking the new law’s enforcement Wednesday in response to a lawsuit filed earlier this year by Americans for Prosperity, the conservative group founded by the Koch brothers.

The lawsuit challenged the new disclosure law on constitutional grounds, arguing that its requirement that 501(c)4 groups must reveal contributors who give more than $10,000 if the group engages in any political activities, lobbying or campaigning infringes on First Amendment rights and could have a chilling effect on its ability to raise funds.

Supporters of the measure said requiring the disclosure was intended to reduce the rising influence of dark money on state politics and elections and reveal the people or interests that bankroll these independent groups’ operations.

In addition to the donor disclosure, the law also mandates the disclosure of expenses of more than $3,000 and boosted the contribution limits to state and county political committees, which are already subject to strict reporting requirements.

Martinotti sided with Americans for Prosperity, writing that the disclosure law “brings communications of purely factual political information into a disclosure and financial-reporting regime historically limited to electioneering communications.”

Electioneering is usually defined as communications intended to encourage voters to elect a specific candidate. However, the law seeks to require disclosure by groups that engage in lobbying and advocacy on issues and legislation.

The judge's ruling does not overturn the law, but it does bar it from being implemented or enforced until there is a final ruling in the case.

The law’s first mandatory disclosure date was expected to be later this month on Oct. 15 and it seems unlikely the injunction will be lifted before the upcoming November election when all 80 seats in the state Assembly are up for grabs.

In a statement, AFP’s New Jersey director, Tony Howley, praised the decision for “preserving all Americans’ First Amendment rights while this important issue is litigated.”

“Americans should be free to advocate for causes they believe in without retaliation by elected officials,” he said.

The legislation was originally introduced by state Sen. Troy Singleton, D-7 of Delran, in 2016 at the urging of New Jersey Election Law Enforcement Commission director, Jeff Brindle, who expressed concerns about the rapid increase in dark-money-group spending over the last decade.

The bill received little attention before this year, when it gained traction in the wake of news reports about dark-money groups aiding Murphy and Senate President Stephen Sweeney.

Murphy had originally conditionally vetoed the measure, citing constitutional questions and other concerns, but he later agreed to sign an identical bill into law in order to avoid an embarrassing veto override by the Legislature.

Last month, New Direction New Jersey, the group that has aided Murphy, voluntarily revealed a list of 25 donors who contributed close to $6.8 million to the nonprofit since its inception in 2017.

Leaders of the group had originally promised to reveal its donors last year but reversed amid in-fighting between Murphy and Sweeney.

Most of the group’s money came from Garden State Forward, a super PAC affiliated with the New Jersey Education Association, the state’s largest teachers union.

The Associated Press contributed to this story

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